Julie’s $80k debt
Student loan as checking account
At 45 years old, after my divorce, I’d decided to attend law school. When student loan money was handed out, I took the maximum amount offered, even though I didn’t need it. Tuition was super-low, I had a full time job, child support, and a live-in boyfriend helping out with expenses and credit cards which I considered free money. With the student loan money I paid off my car loan, took my toddler to Disneyland a couple times and spent freely. My justification was that I didn’t spend enough time with her and I wanted to make it up to her. I treated myself during law school because school was just so gosh darned demanding. Even with the student loan money, credit cards, full time job, etc., I was always broke.
At the end of law school the student loan money bled out. The boyfriend was gone so half the mortgage and expenses disappeared. The full-time job I’d had during school did not pay the bills. I looked at my checking account and I was stunned. Shocked. I was out of money.
FAQ
Q. What about your savings?
A. What savings?
Q. But what about the salary, student loan, boyfriend contribution, monthly subsidies from mom you forgot to mention?
A. …and the $500/month child support I also forgot to mention? I repeat, no savings. Can you leave me alone I’m getting a headache?
Q. Wait, why you can’t live off your salary and child support?
A. Twenty thousand dollars worth of credit card debt.
Q. What?
A. Twenty thousand dollars worth of credit card debt and making hundreds of dollars of premiums every month.
Q. Stunned silence.
Q. But you passed the bar, got a high-paying attorney job and paid off your debt and started saving?
A. Nope. I kept the paralegal job and failed the bar four times.
I struggled with money for years, looking for better paying jobs, getting handouts from my mom, taking the bar exam ever so often. I found a better paying job, lost it, came back to the paralegal job for two years, then finally got laid off from that job.
I wasn’t paying anything towards my $80,000 student loans all this time because either my income/outgo ratio was almost negative, or I had no income except for unemployment. I didn’t know what completely and desperately broke was until I couldn’t find a job for three years. I applied and interviewed and networked and it was a nightmare. I worried about money constantly and beat myself up for the ridiculous ways I’d handled money, and hated myself for whatever reasons I could think of for not being able to find a job.
During this time I was paying five hundred dollars a month for COBRA health insurance. I’m in my fifties at this point and couldn’t afford to be without it.
In the spring of 2013 the North Carolina government (the only state in the country which did this) decided to summarily stop emergency extended unemployment benefits at the end of June. I had to find any kind of job, and even though it was part-time and hours were not guaranteed, I applied to be a substitute teacher.
It turned out that I liked substituting, I liked working with kids, I liked working with special needs kids. I decided to apply to school for a license as a special education teacher. This meant student loan money! And subsidized health insurance!
Currently I’ve finished my first year of school, and the student loan money left over from tuition I’ve once again had to treat as income. But I use it for necessities, and with that money, along with substitute pay and child support, I can just about make ends meet. I try not to use credit cards, but I splurge sometimes. This is not a story of recovery.
There is no happy ending. I hope to begin working full-time this year or next. As a teacher, I’ll never make much money. Due to my stupid and self-indulgent way of handling money I have no savings, no 401K, no retirement. Because I’ll be working full-time, I’ll begin paying off my loans, and because I’m in my 50s I’ll be paying off my student loans until I die.
